Honda has reported a 12% increase in its January-March quarter profit thanks to growing sales and in spite of adverse currency effects.
Honda said it posted a profit of 107.7 billion yen ($988 million) in the quarter ended March 31, up from 95.9 billion yen a year earlier. That's on sales of 3.9 trillion yen ($36 billion), up 4 percent.
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Consolidated operating profit for the fiscal fourth quarter amounted to 126.8 billion yen, a decrease of 8.2% compared to the same period last year, due primarily to an increase in selling, general and administrative (SG&A) expenses and unfavourable foreign currency effects.
The company also suffered from costs related to the Takata airbag inflators recall.
Honda's annual profit in the fiscal year soared nearly 72 percent to 1.06 trillion yen, due primarily to the impact of a reduction of corporate tax rates in the US.
Consolidated sales revenue for the fiscal year amounted to 15,361.1 billion yen, an increase of 9.7% compared to the previous fiscal year, due primarily to an increase in sales revenue from all businesses and favourable foreign currency effects. Consolidated operating profit for the fiscal year amounted to 833.5 billion yen, a decrease of 0.9% compared to the previous fiscal year, due primarily to an increase in selling, general and administrative (SG&A) expenses, the settlement of multi-district class action litigation and the reverse effect from the impact of pension plan amendments in the previous fiscal year. This was despite strong motorcycle sales mainly in Asian countries, such as India and Vietnam, and the positive effect of cost reduction efforts.
Consolidated profit before income taxes for the fiscal year amounted to 1,114.9 billion yen, an increase of 10.7% compared to the same period last year, due primarily to an increase in the share of profit of investments accounted for using the equity method.
Honda forecasts a 16% drop in operating profit to 700 billion yen ($6.40 billion) for the year to March 2019, primarily due to the impact of a stronger yen.
